Zeller Raises $25M AUD in Series A Funding

Zeller Secures $25 Million AUD in Series A Funding

Zeller, a financial services and payments startup established by former leaders from Square, has announced a $25 million AUD (approximately $19.4 million USD) Series A funding round completed last year.

Investment Details

This funding round was spearheaded by Addition, the investment firm created by Lee Fixel, a former partner at Tiger Global. Returning investors, Square Peg and Apex Capital, also participated in the round. The Melbourne-based firm reports this represents one of the largest pre-launch Series A investments in Australia to date.

Previously, Zeller secured a $6.3 million AUD (USD $4.9 million) seed round in June of 2020. The company was founded by Ben Pfisterer, formerly the head of Asia Pacific and Australia at Square, and Dominic Yap, who previously led strategy and growth initiatives at Square.

Growth and Expansion Plans

Over the last six months, Zeller has significantly expanded its team, adding 38 new employees and now boasting a workforce of 50 individuals.

The newly acquired funds will be allocated to bolstering Zeller’s capabilities in product development and engineering. Investments will also be made in expanding the marketing, sales, and customer support divisions as the company prepares for its official launch. According to chief executive officer Pfisterer, the launch is “imminent,” though a specific date remains unconfirmed.

A Unified Financial Solution for SMBs

Zeller is developing a comprehensive, integrated payments and financial services platform. This solution is targeted towards small- and medium-sized businesses (SMBs) that currently manage multiple providers for essential services.

Key Features

• Payment Terminals: Providing hardware for accepting payments.
• Point of Sale Systems: Integrated software for managing sales transactions.
• E-commerce Payments: Facilitating online payment processing.
• Transaction Accounts: Offering business banking solutions.
• Business Mastercard: Providing a dedicated business credit card.

Zeller’s integrated approach aims to streamline payment acceptance, fund access, and overall financial management for businesses. The company will operate without lock-in contracts and offer a single, transparent fee structure for card payments.

“We recognize the difficulties inherent in establishing a new brand within a market dominated by established banking institutions,” stated Pfisterer. “However, the potential for disruption is substantial.” He emphasized that the team’s extensive industry experience provides a deep understanding of the challenges faced by business owners when setting up financial services.

Market Focus

Despite the increasing prevalence of e-commerce, approximately two-thirds of transactions continue to occur in person. Zeller’s primary focus is currently on businesses processing up to $10 million AUD annually, with a significant portion of these transactions taking place face-to-face.

Pfisterer described the target customer as ranging from sole proprietors to companies with larger teams, operating in diverse sectors such as retail, hospitality, mobile services, events, and trades. Zeller estimates its addressable market in Australia encompasses nearly 1.5 million merchants, with a scalable model for expansion into other regions.

Competitive Landscape

The Australian payments and financial services sector includes established players like Square, eWAY, PayPal, Ayden, and Stripe.

Pfisterer noted that eWAY, Stripe, and Adyen primarily concentrate on e-commerce payment processing, representing only one aspect of a business’s financial needs. Businesses still require solutions for in-person payments, often necessitating a separate merchant terminal and account from a traditional bank. Conversely, PayPal and Square largely cater to micro-merchants. “Challenges arise as businesses grow and require a more comprehensive suite of services.”

Zeller is planning to introduce additional payment and financial services products, alongside integrations with popular tools like point-of-sale and accounting software, to support businesses as they scale.

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